Shared ownership is a government-backed scheme for people who are unable to afford to buy a home at full market value and has helped many first time buyers get onto the property ladder.
It’s a part buy/part rent scheme where you buy a share in the property and pay rent on the share you don’t own. The home can either be a new build or an existing shared ownership home that you’re looking to purchase through the resale programme from Gateway or any other housing association.
You initially purchase between 25% and 75% of the property’s value and pay a subsidised rent on the remaining share that you don’t own. You can purchase more shares at a later date, through a process called Staircasing which will reduce the amount of rent you pay.
How it works
When you buy a shared ownership home you become a leaseholder and Gateway is your landlord. Your lease is a legal document that proves you own part of your home and you have the same rights and responsibilities as a full owner-occupier.
You take out a mortgage for a share of the home’s purchase price and then pay a subsidised rent on the share you don’t buy. Typically there will also be a monthly service charge payable.
If you decide to buy the remaining share of your home, you will then own your home outright. If you property is a house, you may be able to purchase your freehold. If so, your solicitor will arrange for the freehold to be transferred to you like any other house owner. If you own an apartment, you’ll remain a Leaseholder like any other apartment owner. This is because your home is in a block of apartments and your lease sets out responsibilities for use and maintenance of all shared areas.
If you become a full owner of an apartment you will still be responsible for the ground rent and service charge, which includes the buildings insurance.
If you become a full owner of a house you may still be required to pay an estate charge if you are living in a development with shared maintenance areas. You will also need to arrange your own buildings insurance, as this will not be covered by the service charge.
You will be eligible for shared ownership in London if:
- You’re aged 18 years or older
- Your annual household income is less than £90,000
- You’re a first time buyer or in the process of selling your home
- You cannot afford to buy a home on the open market which is suitable for your housing needs
- You aren’t in rent or mortgage arrears
- You are able to demonstrate that you have a good credit history (no County Court Judgements or bad debts) and can afford the costs and regular payments involved in buying a home
Gateway's first priority group are people who live or work in the borough the homes are located. In some instances priority for Shared ownership properties can also be given to applicants:
- That work for the Ministry of Defence
- Who are council and housing association tenants
- On some developments, secondary priority is given to applicants who live or work in the neighbouring boroughs
Please note: You should always check the eligibility required with the specific development, as there may be specific criteria.